Jerry Fang: China enforcement review 2015

With the recent downfall of two more high-level government officials from Beijing and Shanghai, China’s anti-corruption campaign rolled on in 2015. Here are some highlights from the past year.

The crackdown on corrupt high-level government officials spread to all 31 provinces and municipalities directly under the central government. In 2015, more than 20 state officials above provincial/ministerial level (“PML officials”) were investigated for corruption. The total number of PML officials charged has now exceeded 120 since the 18th CPC National Congress in 2012.

According to Chinese state media, between January and September 2015, 477 government officials were named as suspects on the CPC Central Commission for Discipline Inspection’s website. Between January and November 2015, the Supreme People’s Procuratorate announced 445 case involving corruption.

The vast majority of anti-corruption cases involving lower level government officials are not reported. In fact, statistics show that from the 18th CPC National Congress in 2012 until August 2015, the prosecution has handled 110,000 bribery cases, in which 140,000 individuals were involved. The statistics show that China’s anti-corruption campaign is not a “tide” that will eventually fade away, but will continue for the foreseeable future.

Chinese Communist Party members must meet higher anti-graft standards than ordinary citizens. In October 2015, the Communist Party of China issued its guidelines and disciplinary measures against corruption, which established a stronger prohibition of corruption than applicable Chinese law. These guidelines and measures apply to all CPC members and holds them to a stricter standard for anti-corruption compared to ordinary people in China.

For example, according to Article 126 of the newly amended CPC Discipline Regulations, a CPC member’s luxury consumption even with his legitimate income will be subject to potential disciplinary actions. Under the same regulation, where the prosecution decides not to bring a criminal charge against a CPC member because the violation of law is minor, the CPC member will still face party disciplinary action.

China’s anti-corruption efforts spread overseas. The Fox Hunt operation launched in 2014 became the Sky Net operation in 2015 as part of China’s efforts to crack down on corruption on the international level. With strengthened international cooperation against corruption, corrupt Chinese officials have been repatriated from various countries including the U.S.

By the end of November 2015, 863 corrupt individuals were captured under the Sky Net and 738 of them were apprehended overseas.

The Sky Net operation has taken place in 68 countries and hunted down 102 individuals from developed countries: 48 in the U.S., 34 in Canada, 19 in Australia and one in U.K. Among these captured individuals, two suspects were repatriated from the U.S. and four were repatriated from the Europe.

The anti-graft campaign targeted specific industries. As China’s top graft buster, the Central Commission for Discipline Inspection’s industry-specific targets indicate that the anti-corruption drive will continue into 2016.

As of mid-November 2015, about 100 CCDI inspection teams had been deployed since the 18th People’s Congress in 2012, overing 142 entities, including government departments, SOEs, national banks, securities commissions, and so on.

In the most recent round of CCDI inspections focusing on the financial services industry, 29 individuals were placed under investigation as of mid-December 2015. They include high-level officials at the China Securities Regulatory Commission, the People’s Bank of China, the National Bureau of Statistics, and the China Agricultural Bank.

_____

Jianwei (Jerry) Fang is a partner with the China-based Global Law Office in the firm’s Shanghai and Beijing offices. He was a judge in China and studied law at Columbia. He can be reached here.

Legal

Quick Links

About

We set out in 2007 to bring our readers free and unrestricted coverage of all Foreign Corrupt Practices Act enforcement actions — the first to do that in real-time.

Since then we’ve published more than 7,500 posts by 600 different authors.

Our mission is to help compliance professionals and others everywhere understand how corruption happens, what it does to people and institutions, and how anti-corruption laws and compliance programs work.